Pillars of Europe's economy start to show cracks

Updated
February 14, 2013 19:27:00

Figures show both the French and German economies contracted in the fourth quarter of 2012. Weak export markets are being blamed for the result. Meanwhile Wesfarmers produced a solid earnings result today. Half year earnings rose 9 per cent as the conglomerate enjoyed better results at its Coles, Bunnings and Kmart stores.

TIM PALMER: David Taylor joins me now for a look at today's business and finance.

David we heard you earlier on Japan's economic woes. Another major economy has raised a red flag tonight?

DAVID TAYLOR: Tim, France and just recently Germany as well. The French economy contracted 0.3 per cent in the fourth quarter of last year. The Germany economy, just breaking now, contracted 0.6 per cent in the fourth quarter of last year. Both countries are suffering from falling export demand as the global economy weakens. So Europe could wake up to a nasty surprise this morning.

TIM PALMER: Yeah, shock figures. Back home, where there any big profit results aside from Rio?

DAVID TAYLOR: Wesfarmers released their half-year earnings up 9 per cent to $1.2 billion. Tim, strong pre-tax earnings Coles, Bunnings and Kmart helped their result. The company's coal exposure was one of the weaknesses on their balance sheet.

Wesfarmers shares though up 1 per cent to $38.88.

David Jones was another reporter today. The retailer reported a 1.4 per cent drop in sales revenue to $590 million but Tim that was over the Christmas period. Analysts were hoping for a bit more than that. And Paul Zara says they're going to exit out of DVDs, music and video games. So no more electronics at David Jones. Shares down 0.4 per cent to $2.67.

TIM PALMER: And how did things look on the wider market?

DAVID TAYLOR: Look we ended up, up, at the end of the day at 32 points, or 0.6 per cent, to 5,057.

TIM PALMER: Could be a tough day tomorrow, David Taylor thank you very much.